MANAMA, Bahrain — Protesters demanding sweeping political reforms from Bahrain’s rulers held their ground Wednesday in an Egypt-style occupation of the capital’s landmark square, staging a third day of demonstrations that have brought unprecedented pressure on one of Washington’s key allies in the Gulf.

Security forces have pulled back sharply — apparently on orders to ease tensions — after clashes that left at least two people dead and dozens injured. Police helicopters, however, flew low over a major funeral procession for one of those killed in which mourners called him a “martyr” and pledged more protests in the island nation — home to the U.S. Navy’s 5th Fleet.

Thousands of people spent the night in a makeshift tent camp in Manama’s Pearl Square, which has been swarmed by demonstrators, some draping themselves in the Bahraini flag. One demonstrator used a bullhorn to urge protesters to remain until their demands are met, as the Arab wave for change takes hold in the Gulf.

The protests began Monday as a cry for the country’s Sunni monarchy to loosen its grip, including hand-picking most top government posts, and open more opportunities for the country’s majority Shiites, who have long complained of being blocked from decision-making roles.

But the uprising’s demands have steadily reached further. Many protesters are calling for the government to provide more jobs and better housing and free all political detainees. Increasingly, protesters are also chanting slogans to wipe away the entire ruling dynasty that has led Bahrain for more than 200 years.

“The people want the removal of the regime,” chanted one group.

Social networking websites were abuzz with calls to press ahead with the protests as well as insults from presumed government backers who called the demonstrators traitors and agents of Shiite powerhouse Iran.

As night fell Wednesday, the mood suggested protesters were settling in for the long haul. People sipped tea, ate donated food and smoked apple- and grape-flavored tobacco from water pipes. The men and women mainly sat separately — the women a sea of black in their traditional dress.

The leadership of the protesters is still unclear and disorganized. A few scuffles have broken out between some of the people in the main area near the speakers’ platform.

Among the most commonly stated demands were the creation of a constitutional monarchy, fair elections, release of political prisoners, and the resignation of the prime minister and the entire parliament.

“I am not a political man. I am a musician, but I know I want a chance to pick my own prime minister,” said Jassem Jawad, 23. “How is it fair for a prime minister to hold power for 39 years? It’s ridiculous. We want a real democratic system.”

The head of the largest Shiite political bloc, Sheik Ali Salman, said there are no demands for an Islamic role in politics.

“We are not looking for a religious government like Iran’s, but we demand a civil government” that represents Shiites and Sunnis, he told a news conference.

The group, Al Wefaq, has 18 seats in the 40-member parliament, but it is boycotting the chamber to protest the violence against demonstrators.

Bahrain’s state TV gave limited reports on the protests.

The pan-Arab broadcaster Al-Jazeera, founded by the emir in nearby Qatar, also gave sporadic coverage. That compares with nearly round-the-clock attention to Egypt’s turmoil, suggesting worry by Qatar’s Sunni rulers about the unrest coming to their doorstep.

Prayers in the square were held in the Shiite manner and an imam gave a sermon about the strength of the Bahraini youth.

“This square is a trust in your hands, and so will you whittle away this trust or keep fast?” the imam said. “So be careful and be concerned for your country, and remember that the regime will try to rip this country from your hand. But if we must leave it in coffins, then so be it!”

The main protest was held in the square under a nearly 300-foot (90-meter) monument cradling a giant white pearl-shaped ball that symbolizes Bahrain’s heritage as a pearl diving center. Organizers have set up a medical tent as well as one to help journalists.

Britain’s minister for Middle East and North Africa, Alistair Burt, said he “concerned by the reports of excessive use of force by police” in Bahrain.

“I call on all sides to exercise restraint and refrain from violence,” said Burt.

U.S. State Department spokesman P.J. Crowley said Tuesday the Obama administration is “very concerned” about violence against protesters.

“The United States welcomes the government of Bahrain’s statements that it will investigate these deaths, and that it will take legal action against any unjustified use of force by Bahraini security forces,” Crowley said. “We urge that it follow through on these statements as quickly as possible.”

Bahrain is a linchpin to the U.S. military framework in the Gulf. The 5th Fleet base is considered one of the Pentagon’s major counterweights against Iran’s growing military reach in the region.

Although Bahrain is sandwiched between two of OPEC’s heavyweights, Saudi Arabia and Qatar, it has limited oil resources and depends heavily on its role as a regional financial hub and playground for Saudis, who can drive over a causeway to enjoy Bahrain’s Western-style bars, hotels and beaches.

On Tuesday, Bahrain’s King Hamad bin Isa Al Khalifa made a rare nationwide TV address to offer condolences for the deaths, pledge an investigation into the killings and promise to push ahead with reforms that include loosening state controls on the media and Internet.

The government said Wednesday that people suspected of involvement in the deaths had been detained by the Interior Ministry, although it gave no number or details.

Al-Matrook was killed Tuesday as police tried to disperse people gathered for the funeral march of the first victim to die in the unrest. Both were Shiites, feeding the resentment in a community that represents 70 percent of Bahrain’s 500,000 citizens but has long alleged systematic discrimination.

A wave of arrests last year against Shiite activists touched off riots and protest marches. But authorities are moving ahead with a highly sensitive trial of 25 Shiites accused of plotting against the ruling system. The next court session is scheduled for Feb. 24.

In the past week, Bahrain’s rulers have tried to defuse calls for reform by promising nearly $2,700 for each family and pledging to loosen state controls on the media.

Similar concessions have been made by leaders in the Gulf to try to pre-empt protests.

In Oman, the ruling Sultan Qaboos Bin Said announced Wednesday an increase in the minimum monthly salary for private sector workers from 140 rials ($365) to 200 rials ($520). Last month, the sultan met with U.N. Secretary-General Ban Ki-moon to discuss the growing political unrest in the Arab world.